Delhi High Court
Vira Construction Co. vs Delhi Development Authority on 9 April, 1997
JUDGMENT Dr. M.K. Sharma, J.
1. Disputes arose between the petitioner and the respondent in respect of construction of 1620 DVS for LIG at Panka Road Residential Scheme. The said disputes were referred to the arbitration of Shri R. C. Malhotra, the respondent No. 2. The Arbitrator after nearing the parties and after receiving evidence, made and published his award on 29-5-1991. A petition was filed in this Court under Sections 14 and 17 of the Arbitration Act, by the petitioner for filing of the award and making the award a Rule of the Court. The said petition was registered as Suit No. 201 R-A/1991.
2. In pursuance of the order passed by this Court, the Arbitrator filed the award in this Court and on such filing of the award, Suit No. 2492/1991 was registered in this Court. Notices having been issued to this parties intimating them about filing of the award in this Court, the respondent No. 1 filed an objection to the aforesaid award, which was registered as I.A. No. 2436/1991.
3. By this order I propose to dispose of both the suits as well as the objection registered as I.A. 2436/1991.
4. I have heard the learned counsel appearing for the objector/respondent No. 1 as also the counsel appearing for the petitioner.
5. The first objection of the respondent is in respect of the award passed by the Arbitrator against Claim No. 2. In this claim the Contractor petitioner claimed a sum of Rs. 9,707.90 on account of wrongful penal rate recovery of materials.
The Arbitrator after considering the evidence on record came to the conclusion that the respondent No. 1 was unable to give any convincing reason for making penal recovery of Rs. 9,707.90. Out of the aforesaid amount as against recovery of a sum of Rs. 7,326.90, the Arbitrator has further held that in respect of the aforesaid amount the respondent did not issue any notice as per provisions under Clause 42 of the Contract and on that count also, the penal recovery made by the respondent No. 1 of the aforesaid amount cannot be held to be justified.
The counsel appearing for the objector/respondent No. 1 drew my attention to Clause 42 of the Contract and referring to the same, submitted before me, that notice as envisaged under Clause 42 of the Contractor is not mandatory and, therefore, the Arbitrator committed an error of law apparent on the face of the records by holding that since no notice as per provision under Clause 42 of the Contract was issued, the said penal recovery was not justified.
I have heard the learned counsel appearing for the petitioner as well on this proposition. The counsel relied upon a decision of this Court in Salwan Construction Co. v. U.O.I. and other .
I have carefully perused the award passed by the Arbitrator in respect of this claim. The respondent No. 1 sought recovery of Rs. 9,707.90 on ground of consumption of cement and steel beyond permissible limit. On the evidence on record, the Arbitrator came to the conclusion that the respondent No. 1 has failed to give any convincing reason for making penal recovery and also failed to substantiate its action. The aforesaid conclusion is arrived at by the Arbitrator on appreciation of evidence on record and, therefore, this Court has no power and jurisdiction to act as an appellate authority to upset the aforesaid conclusion of facts arrived at by the Arbitrator. The Arbitrator has given reasons for its conclusion arrived at in respect of this claim and for making the award and, therefore, I see no reason for upsetting the said award which, I hereby upheld.
In that view of the matter, it is not necessary for me to consider as to whether the ratio of the decision of this Court in Salwan Construction Co. (supra) is applicable or not to the facts of the present case.
6. The next objection is in respect of the award passed by the Arbitrator for Claim No. 3 awarding a sum of Rs. 8,254.34 as against the claim of Rs. 10,726.90.
The respondent No. 1 deducted an amount of Rs. 10,726.90 from the final bill of the petitioner in respect of certain items. For making the aforesaid wrongful deduction, the respondent No. 1 resorted to its power vested under Clauses 6 and 14 which empowers the respondent No. 1 for making payment at reduced rates for item not executed fully or not done as per prescribed specifications. However, the said power available to the respondent No. 1 is not unlimited or unrestricted. It is apparent from the perusal for the said Clauses that certain procedures have to be followed while taking recourse to the aforesaid clauses. The Arbitrator on consideration of the aforesaid provisions found that the reductions in the rate made in respect of most of the items have been found to be in violation of provisions contained in Clauses 6 and 14 of the Contract, particularly, when these reductions have been made after a period of more than three years of completion of the work and without giving opportunity to the claimants to undo the shortcomings at appropriate time.
On consideration of the evidence on record, the Arbitrator found the reduction amounting to Rs. 2,472.56 made in respect of G.I. overflow pipe and fan clamp to be justified. The Arbitrator, however, found that the deductions amounting to Rs. 8,254.34 was not justified and accordingly awarded the aforesaid amount Rs. 8,254.34 in favour of the petitioner.
In my considered opinion, the thought process of the Arbitrator is indicated in the award. He has given his considered thought to the deductions made by the respondent No. 1. In the light of the provisions of Clauses 6 and 14 of the
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Contract and on appreciation thereof, held that the deduction amounting to Rs. 8,254.34 was not justified, as the said reductions in the rate was in violation of the provisions contained in Clauses 6 and 14 of the Contract having been made after a period of more than three years of completion of work and also without giving an opportunity to the claimant to undo the shortcomings at appropriate time.
I see no reason to upset the aforesaid award passed by the Arbitrator which, in my considered opinion, is based on reasons and on appreciation of the records of the case. This part of the award is accordingly upheld.
7. The next objection of the respondent No. 1 is in respect of the award passed by the Arbitrator against Claim No. 17.
In respect of the aforesaid claim, the Contractor claimed a sum of Rs. 20,000/- and the Arbitrator has awarded an amount of Rs. 12,912/-. On careful perusal of the award passed by the Arbitrator, I find that this award also relates to reduction of rate by the respondent No. 1. The Arbitrator on consideration of the records found that the action of the respondent No. 1 reducing the rate after a period of more than three years of completion of work is not justified specially when no notice as required as per terms and conditions of the Contract was given to the petitioner. I see no reason to interfere with this award as well on the same grounds for which the award in respect of the Claim No. 3 has been upheld. Thought process of the Arbitrator is indicated and the award is based on reasons and therefore, the said award also stands upheld.
8. The respondent No. 1 has also filed objection in respect of Claim No. 30 for which the original claim of the Contractor was Rs. 26,831.65 and the Arbitrator has awarded a sum of Rs. 18,294/- in respect of the said award.
On consideration of the evidence on record, the Arbitrator found that the petitioner supplied at site ornamental grill which involves use of MS flat only instead of square or round bars which involves extensive welding and labour as compared to plain grill. The Arbitrator found that no drawing for the grill was enclosed with the tender document and therefore, the pattern of the grill was neither known to the petitioner, nor for that matter to the respondent No. 1 at the time of tender except that the grill was to be constituted of MS flat, square or round bars and was to be bolted or screwed.
According to the Arbitrator, since the Contractor has supplied merely pieces of MS flat only, duly welded and the grills so made is fixed to the window by welding, more expenditure must have been incurred by the petitioner in providing the same and held that the claimant is accordingly entitled to extra payment on this account and awarded the aforesaid amount of Rs. 18,294/-.
The aforesaid conclusion of the Arbitrator is based on reasons and arrived at after appreciation of evidence on record and, in my considered opinion, I have neither any power nor jurisdiction to re-appreciate the evidence on record to come to a different conclusion. This award passed by the Arbitrator accordingly stands upheld.
9. The next objection is in respect of Claim No. 31 in which the petitioner claimed a sum of Rs. 11,000/- on account of extra thickness in respect of the item No. 50 of the final bill.
The Arbitrator as against the aforesaid claim awarded an amount of Rs. 2,032/-. The aforesaid award has been passed by the Arbitrator on the basis of quantity and rate admitted by the respondent No. 1. Since the award is based on reasons and on appreciation of evidence, I do not intend to interfere with the said award and accordingly, the said award stands upheld.
10. Objection has also been filed by the respondent No. 1, as against the Claim No. 35 of the petitioner in which the petitioner claimed a sum of Rs. 50,000/- on account of infructuous expenditure and damages sustained by the petitioner due to various breaches committed by the respondent No. 1.
On consideration of evidence on record, the Arbitrator found that due to prolongation of work and delay in completion due to site hindrances for which the respondent No. 1 was responsible, the petitioner is entitled to an amount which it had incurred to maintain certain establishment at site such as supervisory and watch and ward staff and accordingly awarded a sum of Rs. 12,000/- under that Head. The conclusion arrived at by the Arbitrator that the petitioner was not responsible for delay in completion of work and that the responsibility for the delay in completion due to site hindrances rested with the respondent is a conclusion arrived at by the Arbitrator on appreciation of evidence. The fact that the petitioner had to maintain certain establishment at site such as supervisory and watch and ward staff is held to be justified by the Arbitrator on evidence on record. There is no error apparent on the face of the records in this award and accordingly the same is also upheld.
11. The counter claim of the respondent No. 1 to the extent of Rs. 6,009.62 on account of excess payment made to the petitioner was found to be not justified by the Arbitrator and the same was disallowed. In respect of the said award also, the respondent No. 1 has filed its objection.
In respect of the aforesaid claim, the Arbitrator held that there was no jurisdiction on the part of the respondent in initiating recovery on account of difference in rate paid during the execution and sanctioned more than four years after completion of the work and more than one year after the finalisation of the bill.
I see no reason to take a different view from that of the Arbitrator in respect of the aforesaid award.
12. In the result, the objections filed by the respondent No. 1 has no merit and is accordingly rejected. The award passed by the Arbitrator is, accordingly, made a Rule of the Court. Let a decree be drawn up in terms of the award. In addition, the petitioner shall be entitled to interest at the rate of 12% per annum from the date of the decree till realisation in terms of Section 29 of the Arbitration Act. The parties, shall, however, bear their own costs.